2Q2013 Philly Fed Economic Forecasters See Little Change in Outlook for 2013

Summary of forecaster’s outlook follows.

Outlook for Growth Holds Steady as Unemployment Outlook Improves

The outlook for growth in the U.S. economy over the next three years is little changed from that of three months ago, according to 42 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The panel expects real GDP to grow at an annual rate of 1.8 percent this quarter and 2.3 percent next quarter and to rise to 3.2 percent in the second quarter of 2014. On an annual-average over annual-average basis, the forecasters see real GDP growing 2.0 percent in 2013, up slightly from the previous estimate of 1.9 percent. The forecasters predict real GDP will grow 2.8 percent in 2014, 3.0 percent in 2015, and 2.9 percent in 2016. These projections are nearly the same as those of three months ago.

Healthier conditions in the labor market accompany the nearly unchanged outlook for real output growth. The forecasters predict that the unemployment rate will be an annual average of 7.6 percent in 2013, before falling to 7.1 percent in 2014, 6.6 percent in 2015, and 6.1 percent in 2016. These projections are below those of the last survey.

The panelists also see improvements on the employment front over the next two years. The forecasters’ projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 169,800 in 2013 and 180,400 in 2014, as the table below shows. (These annual-average estimates are computed as the year-to-year change in the annual-average level of nonfarm payroll employment, converted to a monthly rate.)

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